EXHIBIT 10.23
INDUSTRIAL LEASE AGREEMENT
BETWEEN
NEW YORK LIFE INSURANCE COMPANY
AS LANDLORD
AND
DAISYTEK, INC.
AS TENANT
LEASE INDEX
Section Subject
------- -------
1 Basic Lease Provisions
2 Demised Premises
3 Term
4 Base Rent
5 Intentionally Omitted
6 Operating Expenses and Additional Rent
7 Use of Demised Premises
8 Insurance
9 Utilities
10 Maintenance and Repairs
11 Tenant's Personal Property; Indemnity
12 Tenant's Fixtures
13 Signs
14 Intentionally Omitted
15 Governmental Regulations
16 Environmental Matters
17 Construction of Demised Premises
18 Tenant Alterations and Additions
19 Services by Landlord
20 Fire and Other Casualty
21 Condemnation
22 Tenant's Default
23 Landlord's Right of Entry
24 Lender's Rights
25 Estoppel Certificate
26 Landlord's Liability
27 Notices
28 Brokers
29 Assignment and Subleasing
30 Termination or Expiration
31 Intentionally Omitted
32 Late Payments
33 Rules and Regulations
34 Quiet Enjoyment
35 Miscellaneous
36 Special Stipulations
37 Lease Date
38 Authority
39 No Offer Until Executed
Exhibit "A" Demised Premises
Exhibit "B" Intentionally Omitted
Exhibit "C" Special Stipulations
Exhibit "D" Rules and Regulations
Exhibit "E" Certificate of Authority
Exhibit "F" Sign Exhibit
Exhibit "G" Connector Plans and Specifications
INDUSTRIAL LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made as of the "Lease Date" (as
defined in Section 37 herein) by and between NEW YORK LIFE INSURANCE COMPANY, a
New York mutual insurance company ("Landlord"), and DAISYTEK, INC., a Delaware
corporation ("Tenant") (the words "Landlord" and "Tenant" to include their
respective legal representatives, successors and permitted assigns where the
context requires or permits).
W I T N E S S E T H:
1. Basic Lease Provisions. The following constitute the basic
provisions of this Lease:
(a) Demised Premises Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) Demised Premises Square Footage: approximately
120,000 sq. ft.
(c) Building Square Footage: approximately 220,100 sq.
ft.
(d) Annual Base Rent:
Lease Year 1 $374,338.08
Lease Year 2 $374,338.08
Lease Year 3 $374,338.08
Lease Year 4 $374,338.08
Lease Year 5 $374,338.08
(e) Monthly Base Rent Installments:
Lease Year 1 $31,194.84
Lease Year 2 $31,194.84
Lease Year 3 $31,194.84
Lease Year 4 $31,194.84
Lease Year 5 $31,194.84
(f) Lease Commencement Date: April l, 1999
(g) Base Rent Commencement Date: April 1, 1999
(h) Expiration Date: ▇▇▇▇▇ ▇▇, ▇▇▇▇
(▇) ▇▇▇▇: 5 years
(j) Tenant's Operating Expense Percentage: 54.52%
(k) Security Deposit: Not Applicable
(l) Permitted Use: Office and partially automated storage
and distribution of non-toxic products
(m) Address for notice:
Landlord: New York Life Insurance Company
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to: IDI Services Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant: Daisytek, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, CEO
(n) Address for rental payments:
New York Life Insurance Company
c/o IDI Services Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(o) Broker(s): Commercial Tennessee
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
2. Demised Premises. For and in consideration of the rent hereinafter
reserved and the mutual covenants hereinafter contained, Landlord does hereby
lease and demise unto Tenant, and Tenant does hereby hire, lease and accept,
from Landlord all upon the terms and conditions hereinafter set forth the
following premises, referred to as the "Demised Premises", as outlined on
Exhibit A attached hereto and incorporated herein: approximately 120,000 square
feet of space, approximately 6,000 square feet of which is office space, having
an address as set forth in Section 1(a), located within Building I (the
"Building"), which contains a total of approximately 220,100 square feet and is
located within Southpark (the "Project"), located in Shelby County, Tennessee.
3. Term. To have and to hold the Demised Premises for a preliminary
term (the "Preliminary Term") commencing on the Lease Date and ending on the
Lease Commencement Date as set forth in Section 1(f), and a primary term (the
"Primary Term") commencing on the Lease Commencement Date and terminating on the
Expiration Date as set forth in Section 1(h), as the Lease Commencement Date and
the Expiration Date may be revised pursuant to Section 17 (the Preliminary Term,
the Primary Term, and any and all extensions thereof, herein referred to as the
"Term"). The term "Lease Year" shall mean each one (1) year period of the Term
(or portion thereof if the last Lease Year of the Term is less than one (1) full
year)
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beginning on the Lease Commencement Date, and each anniversary thereof, and
ending on the day immediately prior to the next succeeding anniversary of the
Lease Commencement Date.
4. Base Rent. Tenant shall pay to Landlord at the address set forth in
Section 1(n), as base rent for the Demised Premises, commencing on the Base Rent
Commencement Date and continuing throughout the Term in lawful money of the
United States, the annual amount set forth in Section 1(d) payable in equal
monthly installments as set forth in Section 1(e) (the "Base Rent"), payable in
advance, without demand and without abatement, reduction, set-off or deduction,
on the first day of each calendar month during the Term. If the Base Rent
Commencement Date shall fall on a day other than the first day of a calendar
month, the Base Rent shall be apportioned pro rata on a per diem basis (i) for
the period between the Base Rent Commencement Date and the first day of the
following calendar month (which pro rata payment shall be due and payable on the
Base Rent Commencement Date), and (ii) for the last partial month of the Term,
if applicable. No payment by Tenant or receipt by Landlord of rent hereunder
shall be deemed to be other than on account of the amount due, and no
endorsement or statement on any check or any letter accompanying any check or
payment of rent shall be deemed an accord and satisfaction, and Landlord may
accept such check as payment without prejudice to Landlord's right to recover
the balance of such installment or payment of rent or pursue any other remedies
available to Landlord.
5. Intentionally Omitted.
6. Operating Expenses and Additional Rent.
(a) Tenant agrees to pay as Additional Rent (as defined in
Section 6(b) below) its proportionate share of Operating Expenses (as
hereinafter defined). "Operating Expenses" shall be defined as all reasonable
expenses for operation, repair, replacement and maintenance as necessary to keep
the Building and the common areas, driveways, and parking areas associated
therewith (collectively, the "Building Common Area") in good order, condition
and repair, including but not limited to, utilities for the Building Common
Area, expenses associated with the driveways and parking areas (including
sealing and restriping, and snow, trash and ice removal), security systems, fire
detection and prevention systems, lighting facilities, landscaped areas,
walkways, painting and caulking, directional signage, curbs, drainage strips,
sewer lines, all charges assessed against or attributed to the Building pursuant
to any applicable easements, covenants, restrictions, agreements, declaration of
protective covenants or development standards, property management fees, all
real property taxes and special assessments imposed upon the Building, the
Building Common Area and the land on which the Building and the Building Common
Area are constructed, all costs of insurance paid by Landlord with respect to
the Building and the Building Common Area and cost of improvements to the
Building and the Building Common Area required by any law, ordinance or
regulation applicable to the Building and the Building Common Area generally
(but specifically excluding any such improvements made necessary solely as a
result of the particular use of the Building or the Building Common Area by
another tenant of the Building other than Tenant). Operating Expenses shall not
include expenses for the costs of any maintenance and repair required to be
performed by Landlord at its own expense under Section (10)(b) or advertising,
marketing or commission expenses. Further, Operating Expenses shall not include
the costs for capital improvements unless such costs are incurred for the
purpose of causing a material decrease in the Operating Expenses of the Building
or the Building Common Area or are made with respect to improvements made to
comply with laws, ordinances or regulations as described above. Operating
Expenses shall be accounted for in accordance with generally accepted accounting
principles. The proportionate share of Operating Expenses to be paid by Tenant
shall be a percentage of the Operating Expenses based upon the proportion that
the square footage of the Demised Premises bears to the total square footage of
the Building (such figure referred to as "Tenant's Operating Expense Percentage"
and set forth in Section 1(j)). Prior to or promptly after the beginning of each
calendar year during the Term, Landlord shall estimate the total amount of
Operating Expenses to be paid by Tenant during each such calendar year and
Tenant shall pay to Landlord one-twelfth (1/12) of such sum on the first day of
each
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calendar month during each such calendar year, or part thereof, during the Term.
Within a reasonable time after the end of each calendar year, Landlord shall
submit to Tenant a statement of the actual amount of Operating Expenses for such
calendar year, and the actual amount owed by Tenant, and within thirty (30) days
after receipt of such statement, Tenant shall pay any deficiency between the
actual amount owed and the estimates paid during such calendar year, or in the
event of overpayment, Landlord shall credit the amount of such overpayment
toward the next installment of Operating Expenses owed by Tenant or remit such
overpayment to Tenant if the Term has expired or has been terminated and no
Event of Default exists hereunder. The obligations in the immediately preceding
sentence shall survive the expiration or any earlier termination of this Lease.
If the Lease Commencement Date shall fall on other than the first day of the
calendar year, and/or if the Expiration Date shall fall on other than the last
day of the calendar year, Tenant's proportionate share of the Operating Expenses
for such calendar year shall be apportioned prorata.
(b) Any amounts required to be paid by Tenant hereunder (in
addition to Base Rent) and any charges or expenses incurred by Landlord on
behalf of Tenant under the terms of this Lease shall be considered "Additional
Rent" payable in the same manner and upon the same terms and conditions as the
Base Rent reserved hereunder except as set forth herein to the contrary. Any
failure on the part of Tenant to pay such Additional Rent when and as the same
shall become due shall entitle Landlord to the remedies available to it for
non-payment of Base Rent. Tenant's obligations for payment of Additional Rent
shall begin to accrue on the Base Rent Commencement Date.
(c) If applicable in the jurisdiction where the Demised
Premises are located, Tenant shall pay and be liable for all rental, sales, use
and inventory taxes or other similar taxes, if any, on the amounts payable by
Tenant hereunder levied or imposed by any city, state, county or other
governmental body having authority, such payments to be in addition to all other
payments required to be paid Landlord by Tenant under the terms of this Lease.
Such payment shall be made by Tenant directly to such governmental body if
billed to Tenant, or if billed to Landlord, such payment shall be paid
concurrently with the payment of the Base Rent, Additional Rent, or such other
charge upon which the tax is based, all as set forth herein.
7. Use of Demised Premises.
(a) The Demised Premises shall be used for the Permitted Use
set forth in Section 1(l) and for no other purpose without Landlord's consent,
which consent shall not be unreasonably withheld.
(b) Tenant will permit no liens to attach or exist against the
Demised Premises.
(c) The Demised Premises shall not be used for any illegal
purposes, and Tenant shall not allow, suffer, or permit any vibration, noise,
odor, light or other effect to occur within or around the Demised Premises that
could constitute a nuisance or trespass for Landlord or any occupant of the
Building or an adjoining premises. Upon notice by Landlord to Tenant that any of
the aforesaid prohibited uses are occurring, Tenant agrees to promptly remove or
control the same.
(d) Tenant shall not in any way violate any law, ordinance or
restrictive covenant affecting the Demised Premises, and shall not in any manner
use the Demised Premises so as to cause cancellation of, prevent the use of the
fire and extended coverage insurance policy required hereunder. Landlord makes
no (and does hereby expressly disclaim any) covenant, representation or warranty
as to the Permitted Use being allowed by or being in compliance with any
applicable laws, rules, ordinances or restrictive covenants now or hereafter
affecting the Demised Premises, and any zoning letters, copies of zoning
ordinances or other information from any governmental agency or other third
party provided to Tenant by Landlord or any of Landlord's agents or employees
shall be for informational purposes only, Tenant hereby expressly acknowledging
and agreeing that Tenant shall conduct and rely solely on its own due diligence
and investigation with respect to the compliance of the Permitted Use with all
such applicable
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laws, rules, ordinances and restrictive covenants and not on any such
information provided by Landlord or any of its agents or employees.
(e) In the event insurance premiums pertaining to the Demised
Premises, the Building, or the Building Common Area, whether paid by Landlord or
Tenant, are increased over the least hazardous rate available due to the nature
of the use of the Demised Premises by Tenant, Tenant shall pay such additional
amount as Additional Rent, provided Tenant is given reasonable prior notice of
such impending increase and an opportunity to cease or modify such use.
8. Insurance.
(a) Tenant covenants and agrees that from and after the Lease
Commencement Date or any earlier date upon which Tenant enters or occupies the
Demised Premises or any portion thereof, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:
(i) Liability insurance in the Commercial General
Liability form (or reasonable equivalent thereto) covering the Demised Premises
and Tenant's use thereof against claims for bodily injury or death, property
damage and product liability occurring upon, in or about the Demised Premises,
such insurance to be written on an occurrence basis (not a claims made basis),
to be in combined single limits amounts not less than $1,000,000.00 and to have
general aggregate limits of not less than $2,000,000.00 with "umbrella" coverage
with limits of not less than $5,000,000.00 for each policy year. The insurance
coverage required under this Section 8(a)(i) shall, in addition, extend to any
liability of Tenant arising out of the indemnities provided for in Section 11
and, if necessary, the policy shall contain a contractual endorsement to that
effect.
(ii) Insurance covering (A) all of the items included
in the leasehold improvements constructed in the Demised Premises by or at the
expense of Landlord (collectively, the "Improvements"), including but not
limited to demising walls and the heating, ventilating and air conditioning
system and (B) Tenant's trade fixtures, merchandise and personal property from
time to time in, on or upon the Demised Premises, in an amount not less than one
hundred percent (100%) of their full replacement value (or such percentage below
100% which assures full payment by the insurer of any claim) from time to time
during the Term, providing protection against perils included within the
standard form of "all-risks" fire and casualty insurance policy, together with
insurance against sprinkler damage, vandalism and malicious mischief. Any policy
proceeds from such insurance relating to the Improvements shall be used solely
for the repair, construction and restoration or replacement of the Improvements
damaged or destroyed unless this Lease shall cease and terminate under the
provisions of Section 20.
(b) All policies of the insurance provided for in Section 8(a)
shall be issued in form reasonably acceptable to Landlord by insurance companies
with a rating of not less than "A," and financial size of not less than Class X,
in the most current available "Best's Insurance Reports", and licensed to do
business in the state in which the Building is located. Each and every such
policy:
(i) shall name Landlord and Lender (as defined in
Section 24) as an additional insured. In addition, the coverage described in
Section 8(a)(ii)(A) relating to the Improvements shall also name Landlord as
"loss payee";
(ii) shall be delivered to Landlord, in the form of
an insurance certificate acceptable to Landlord as evidence of such policy,
prior to the Lease Commencement Date and thereafter within thirty (30) days
prior to the expiration of each such policy, and, as often as any such policy
shall
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expire or terminate. Renewal or additional policies shall be procured and
maintained by Tenant in like manner and to like extent;
(iii) shall contain a provision that the insurer will
give to Landlord and such other parties in interest at least fifteen (15) days
notice in writing in advance of any cancellation, termination or lapse, or the
effective date of any reduction in the amounts of insurance; and
(iv) shall be written as a primary policy which does
not contribute to and is not in excess of coverage which Landlord may carry.
(c) In the event that Tenant shall fail to carry and maintain
the insurance coverages set forth in this Section 8, Landlord may upon thirty
(30) days notice to Tenant (unless such coverages will lapse in which event no
such notice shall be necessary) procure such policies of insurance and Tenant
shall promptly reimburse Landlord therefor.
(d) Landlord and Tenant hereby waive any rights each may have
against the other on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, their respective property, the Demised Premises, its
contents or to the other portions of the Building, arising from any risk covered
by all risks fire and extended coverage insurance of the type and amount
required to be carried hereunder, provided that such waiver does not invalidate
such policies or prohibit recovery thereunder. The parties hereto shall use
reasonable efforts to cause their respective insurance companies insuring the
property of either Landlord or Tenant against any such loss, to waive any right
of subrogation that such insurers may have against Landlord or Tenant, as the
case may be.
9. Utilities. During the Term, Tenant shall promptly pay as billed to
Tenant all rents and charges for water and sewer services and all costs and
charges for gas, steam, electricity, fuel, light, power, telephone, heat and any
other utility or service used or consumed in or servicing the Demised Premises.
To the extent reasonably possible, such utilities shall be separately metered
and billed to Tenant. Any utilities which are not separately metered shall be
billed to Tenant by Landlord at Landlord's actual cost. In the event Tenant's
use of any utility not metered is in excess of the average use by other tenants,
Landlord shall have the right to install a meter for such utility, at Tenant's
expense, and ▇▇▇▇ Tenant for Tenant's actual use. If Tenant fails to pay any
utility bills or charges, Landlord may, at its option and upon reasonable notice
to Tenant, pay the same and in such event, the amount of such payment, together
with interest thereon at the Interest Rate as defined in Section 32 from the
date of such payment by Landlord, will be added to Tenant's next due payment as
Additional Rent.
10. Maintenance and Repairs.
(a) Tenant shall, at its own cost and expense, maintain in
good condition and repair the interior of the Demised Premises, including but
not limited to the heating, air conditioning and ventilation systems, glass,
windows and doors, sprinkler, all plumbing and sewage systems, fixtures,
interior walls, floors (including floor slabs), ceilings, storefronts, plate
glass, skylights, all electrical facilities and equipment including, without
limitation, lighting fixtures, lamps, fans and any exhaust equipment and
systems, electrical motors, and all other appliances and equipment (including,
without limitation, dock levelers, dock shelters, dock seals and dock lighting)
of every kind and nature located in, upon or about the Demised Premises, except
as to such maintenance and repair as is the obligation of Landlord pursuant to
Section 10(b). During the Term, Tenant shall maintain in full force and effect a
service contract for the maintenance of the heating, ventilation and air
conditioning systems with an entity reasonably acceptable to Landlord. Tenant
shall deliver to Landlord (i) a copy of said service contract prior to the Lease
Commencement Date, and (ii) thereafter, a copy of a renewal or substitute
service contract within thirty (30) days prior to the expiration of the existing
service contract. Tenant's obligation shall exclude any
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maintenance and repair required because of the act or negligence of Landlord,
its employees, contractors or agents, which shall be the responsibility of
Landlord.
(b) Landlord shall, at its own cost and expense, maintain in
good condition and repair the roof, foundation (beneath the floor slab) and
structural frame of the Building. Landlord's obligation shall exclude the cost
of any maintenance or repair required because of the act or negligence of Tenant
or Tenant's agents, contractors, employees and invitees (collectively, "Tenant's
Affiliates"), the cost of which shall be the responsibility of Tenant.
(c) Except to the extent the same is caused by the negligent
action or inaction of Landlord, its employees or agents, and is not covered by
the insurance required to be carried by Tenant pursuant to the terms of this
Lease, Landlord shall not be liable to Tenant or to any other person for any
damage occasioned by failure in any utility system or by the bursting or leaking
of any vessel or pipe in or about the Demised Premises, or for any damage
occasioned by water coming into the Demised Premises unless caused by the
negligent action or inaction of Landlord, costs of which shall be the
responsibility of Landlord.
11. Tenant's Personal Property; Indemnity. Except as otherwise set
forth in this paragraph, all of Tenant's personal property in the Demised
Premises shall be and remain at Tenant's sole risk. Landlord, its agents,
employees and contractors, shall not be liable for, and Tenant hereby releases
Landlord from, any and all liability for theft thereof or any damage thereto
occasioned by any act of God or by any acts, omissions or negligence of any
persons. Landlord, its agents, employees and contractors, shall not be liable
for any injury to the person or property of Tenant or other persons in or about
the Demised Premises, Tenant expressly agreeing to indemnify and save Landlord,
its agents, employees and contractors, harmless, in all such cases, except to
the extent caused by the negligence of Landlord, its agents, employees and
contractors. Tenant further agrees to indemnify and reimburse Landlord for any
costs or expenses, including, without limitation, attorneys' fees, that Landlord
reasonably may incur in investigating, handling or litigating any such claim
against Landlord by a third person, unless such claim arose from the negligence
of Landlord, its agents, employees or contractors. The provisions of this
Section 11 shall survive the expiration or earlier termination of this Lease
with respect to any damage, injury or death occurring before such expiration or
termination. The foregoing shall not release Landlord from liability relating to
the act or negligence of Landlord, costs of which shall be Landlord's
responsibility.
12. Tenant's Fixtures. Tenant shall have the right to install in the
Demised Premises trade fixtures required by Tenant or used by it in its
business, and if installed by Tenant, to remove any or all such trade fixtures
from time to time during and upon termination or expiration of this Lease,
provided no Event of Default, as defined Section 22, then exists; provided,
however, that Tenant shall repair and restore any damage or injury to the
Demised Premises (to the condition in which the Demised Premises existed prior
to such installation) caused by the installation and/or removal of any such
trade fixtures.
13. Signs. No sign, advertisement or notice shall be inscribed,
painted, affixed, or displayed on the windows or exterior walls of the Demised
Premises or on any public area of the Building, except in such places, numbers,
sizes, colors and styles as are approved in advance in writing by Landlord, and
which conform to all applicable laws, ordinances, or covenants affecting the
Demised Premises. Notwithstanding the foregoing, Tenant shall have the right to
affix one (1) identification sign to the exterior of the Demised Premises or to
a free-standing "monument sign" in a location reasonably approved by Landlord,
provided Tenant and such sign otherwise comply with the terms and conditions of
this Section 13. Any and all signs installed or constructed by or on behalf of
Tenant pursuant hereto shall be installed, maintained and removed by Tenant at
Tenant's sole cost and expense. [PARTIES AGREE TO ATTACH AND REFERENCE A
MUTUALLY AGREEABLE SIGN EXHIBIT IF PROVIDED BY TENANT TO LANDLORD PRIOR TO LEASE
EXECUTION.]
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14. Intentionally Omitted.
15. Governmental Regulations. Tenant shall promptly comply throughout
the Term, at Tenant's sole cost and expense, with all present and future laws,
ordinances, orders, rules, regulations or requirements of all federal, state and
municipal governments and appropriate departments, commissions, boards and
officers thereof (collectively, "Governmental Requirements") relating to (a) all
or any part of the Demised Premises, and (b) to the use or manner of use of the
Demised Premises and the Building Common Area. Tenant shall also observe and
comply with the requirements of all policies of public liability, fire and other
policies of insurance at any time in force with respect to the Demised Premises.
Without limiting the foregoing, if as a result of one or more Governmental
Requirements it is necessary, from time to time during the Term, to perform an
alteration or modification of the Demised Premises (a "Code Modification") which
is made necessary as a result of the specific use being made by Tenant of the
Demised Premises, then such Code Modification shall be the sole and exclusive
responsibility of Tenant in all respects; any such Code Modification shall be
promptly performed by Tenant at its expense in accordance with the applicable
Governmental Requirement and with Section 18 hereof. If as a result of one or
more Governmental Requirements it is necessary from time to time during the Term
to perform a Code Modification which (i) would be characterized as a capital
expenditure under generally accepted accounting principles and (ii) is not made
necessary as a result of the specific use being made by Tenant of the Demised
Premises, then (a) Landlord shall have the obligation to perform the Code
Modification at its expense, (b) the cost of such Code Modification shall be
amortized on a straight-line basis over the useful life of the item in question,
as reasonably determined by Landlord, and (c) Tenant shall be obligated to pay
(as Additional Rent, payable in the same manner and upon the same terms and
conditions as the Base Rent reserved hereunder) for the portion of such
amortized costs attributable to the remainder of the Term, including any
extensions thereof. Tenant shall promptly send to Landlord a copy of any written
notice received by Tenant requiring a Code Modification.
16. Environmental Matters.
(a) For purposes of this Lease:
(i) "Contamination" as used herein means the presence
of or release of Hazardous Substances (as hereinafter defined) into any
environmental media from, upon, within, below, into or on any portion of the
Demised Premises, the Building, the Building Common Area or the Project so as to
require remediation, cleanup or investigation under any applicable Environmental
Law (as hereinafter defined).
(ii) "Environmental Laws" as used herein means all
federal, state, and local laws, regulations, orders, permits, ordinances or
other requirements, which exist now or as may exist hereafter, concerning
protection of human health, safety and the environment, all as may be amended
from time to time.
(iii) "Hazardous Substances" as used herein means any
hazardous or toxic substance, material, chemical, pollutant, contaminant or
waste as those terms are defined by any applicable Environmental Laws
(including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any
solid wastes, polychlorinated biphenyls, urea formaldehyde, asbestos,
radioactive materials, radon, explosives, petroleum products and oil.
(b) Landlord represents that, except as revealed to Tenant in
writing by Landlord, to Landlord's actual knowledge, Landlord has not treated,
stored or disposed of any Hazardous Substances upon
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or within the Demised Premises, nor, to Landlord's actual knowledge, has any
predecessor owner of the Demised Premises.
(c) Tenant covenants that all its activities, and the
activities of Tenant's Affiliates (as defined in Section 10(b)), on the Demised
Premises, the Building, or the Project during the Term will be conducted in
compliance with Environmental Laws. Tenant warrants that it is currently in
compliance with all applicable Environmental Laws and that there are no pending
or threatened notices of deficiency, notices of violation, orders, or judicial
or administrative actions involving alleged violations by Tenant of any
Environmental Laws arising out of its activities on or within the Demised
Premises. Tenant, at Tenant's sole cost and expense, shall be responsible for
obtaining all permits or licenses or approvals under Environmental Laws
necessary for Tenant's operation of its business on the Demised Premises and
shall make all notifications and registrations required by any applicable
Environmental Laws. Tenant, at Tenant's sole cost and expense, shall at all
times comply with the terms and conditions of all such permits, licenses,
approvals, notifications and registrations and with any other applicable
Environmental Laws. Tenant warrants that it has obtained all such permits,
licenses or approvals and made all such notifications and registrations required
by any applicable Environmental Laws necessary for Tenant's operation of its
business on the Demised Premises.
(d) Tenant shall not cause or permit any Hazardous Substances
to be brought upon, kept or used in or about the Demised Premises, the Building,
or the Project in violation of any Environmental Laws without the prior written
consent of Landlord, which consent shall not be unreasonably withheld; provided,
however, that the consent of Landlord shall not be required for the use at the
Demised Premises of cleaning supplies, toner for photocopying machines and other
similar materials, in containers and quantities reasonably necessary for and
consistent with normal and ordinary use by Tenant in the routine operation or
maintenance of Tenant's office equipment or in the routine janitorial service,
cleaning and maintenance for the Demised Premises. For purposes of this Section
16, Landlord shall be deemed to have reasonably withheld consent if Landlord
determines that the presence of such Hazardous Substance within the Demised
Premises could result in a risk of harm to person or property or otherwise
negatively affect the value or marketability of the Building or the Project.
(e) Tenant shall not cause or permit the release of any
Hazardous Substances by Tenant or Tenant's Affiliates into any environmental
media such as air, water or land, or into or on the Demised Premises, the
Building or the Project in any manner that violates any Environmental Laws. If
such release shall occur, Tenant shall (i) take all steps reasonably necessary
to contain and control such release and any associated Contamination, (ii) clean
up or otherwise remedy such release and any associated Contamination to the
extent required by, and take any and all other actions required under,
applicable Environmental Laws and (iii) notify and keep Landlord reasonably
informed of such release and response.
(f) Regardless of any consents granted by Landlord pursuant to
Section 16(d) allowing Hazardous Substances upon the Demised Premises, Tenant
shall under no circumstances whatsoever cause or permit (i) any activity on the
Demised Premises which would cause the Demised Premises to become subject to
regulation as a hazardous waste treatment, storage or disposal facility under
RCRA or the regulations promulgated thereunder, (ii) the discharge of Hazardous
Substances into the storm sewer system serving the Project or (iii) the
installation of any underground storage tank or underground piping on or under
the Demised Premises.
(g) Tenant shall and hereby does indemnify Landlord and hold
Landlord harmless from and against any and all reasonable and actual expense,
loss, and liability suffered by Landlord (except to the extent that such
expenses, losses, and liabilities arise out of Landlord's own negligence or
willful act), by reason of the storage, generation, release, handling,
treatment, transportation, disposal, or arrangement for transportation or
disposal, of any Hazardous Substances (whether accidental, intentional, or
negligent) by
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Tenant or Tenant's Affiliates or by reason of Tenant's breach of any of the
provisions of this Section 16. Such expenses, losses and liabilities shall
include, without limitation, (i) any and all expenses that Landlord may incur to
comply with any Environmental Laws; (ii) any and all costs that Landlord may
incur in studying or remedying any Contamination at or arising from the Demised
Premises, the Building, or the Project; (iii) any and all costs that Landlord
may incur in studying, removing, disposing or otherwise addressing any Hazardous
Substances; (iv) any and all fines, penalties or other sanctions assessed upon
Landlord; and (v) any and all legal and professional fees and costs incurred by
Landlord in connection with the foregoing. The indemnity contained herein shall
survive the expiration or earlier termination of this Lease for a period of two
(2) years after said termination or expiration of this Lease.
17. Construction of Demised Premises. Tenant hereby expressly
acknowledges and agrees that it shall accept, and shall be deemed to have
accepted, the Demised Premises AS IS, WHERE IS, and as suitable for the purposes
for which the same are leased hereby and, upon request by Landlord, shall
execute and deliver to Landlord a letter of acceptance in which Tenant (i)
accepts the Demised Premises AS IS, WHERE IS and (ii) confirms that the Lease
Commencement Date, the Base Rent Commencement Date and the Expiration Date
remain as set forth in Section 1, or if revised pursuant to the terms hereof,
setting forth such dates as so revised.
18. Tenant Alterations and Additions.
(a) Tenant shall not make or permit to be made any
alterations, improvements, or additions to the Demised Premises (a "Tenant's
Change"), without first obtaining on each occasion Landlord's prior written
consent (which consent Landlord agrees not to unreasonably withhold) and
Lender's prior written consent (if such consent is required). As part of its
approval process, Landlord may require that Tenant submit plans and
specifications to Landlord, for Landlord's approval or disapproval, which
approval shall not be unreasonably withheld. All Tenant's Changes shall be
performed in accordance with all legal requirements applicable thereto and in a
good and workmanlike manner with first-class materials. Tenant shall maintain
insurance reasonably satisfactory to Landlord during the construction of all
Tenant's Changes. If Landlord at the time of giving its approval to any Tenant's
Change notifies Tenant in writing that approval is conditioned upon restoration,
then Tenant shall, at its sole cost and expense and upon the termination or
expiration of this Lease, remove the same and restore the Demised Premises to
its condition prior to such Tenant's Change. No Tenant's Change shall be
structural in nature or impair the structural strength of the Building. Tenant
shall pay the full cost of any Tenant's Change. Except as otherwise provided
herein and in Section 12 hereof, and except as agreed upon by the parties at the
time a Tenant's Change is approved, all Tenant's Changes shall immediately upon
completion or installation thereof be and become part of the Demised Premises
and the property of Landlord without payment therefor by Landlord and shall be
surrendered to Landlord upon the expiration or earlier termination of this
Lease.
(b) To the extent permitted by law, all of Tenant's contracts
and subcontracts for such Tenant's Changes shall provide that no lien shall
attach to or be claimed against the Demised Premises or any interest therein
other than Tenant's leasehold interest in the Demised Premises, and that all
subcontracts let thereunder shall contain the same provision. Whether or not
Tenant furnishes the foregoing, Tenant agrees to hold Landlord harmless against
all liens, claims and liabilities of every kind, nature and description which
may arise out of or in any way be connected with such work. Tenant shall not
permit the Demised Premises to become subject to any mechanics', laborers' or
materialmen's lien on account of labor, material or services furnished to Tenant
or claimed to have been furnished to Tenant in connection with work of any
character performed or claimed to have been performed for the Demised Premises
by, or at the direction or sufferance of Tenant and if any such liens are filed
against the Demised Premises, Tenant shall promptly discharge the same;
provided, however, that Tenant shall have the right to contest, in good faith
and with reasonable diligence, the validity of any such lien or claimed lien if
Tenant shall give to Landlord, within fifteen days after demand, such security
as may be reasonably satisfactory to Landlord to assure payment thereof and to
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prevent any sale, foreclosure, or forfeiture of Landlord's interest in the
Demised Premises by reason of non-payment thereof; provided further that on
final determination of the lien or claim for lien, Tenant shall immediately pay
any judgment rendered, with all proper costs and charges, and shall have the
lien released and any judgment satisfied. If Tenant fails to post such security
or does not diligently contest such lien, Landlord may, without investigation of
the validity of the lien claim, discharge such lien and Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred in connection
therewith, which expenses shall include any attorneys' fees, paralegals' fees
and any and all costs associated therewith, including litigation through all
trial and appellate levels and any costs in posting bond to effect a discharge
or release of the lien. Nothing contained in this Lease shall be construed as a
consent on the part of Landlord to subject the Demised Premises to liability
under any lien law now or hereafter existing of the state in which the Demised
Premises are located.
19. Services by Landlord. Landlord shall be responsible for providing
for maintenance of the Building Common Area, and, except as required by Section
10(b), hereof Landlord shall be responsible for no other services whatsoever.
Tenant, by payment of Tenant's share of the Operating Expenses, shall pay
Tenant's pro rata share of the expenses incurred by Landlord hereunder.
20. Fire and Other Casualty. In the event the Demised Premises are
damaged by fire or other casualty, Landlord agrees to promptly restore and
repair the Demised Premises at Landlord's expense, including the Improvements to
be insured by Tenant but only to the extent Landlord receives insurance proceeds
therefor, including the proceeds from the insurance required to be carried by
Tenant on the Improvements (provided that Landlord shall be responsible for any
deductible under Landlord's insurance policies). Notwithstanding the foregoing,
in the event that the Demised Premises are (i) in the reasonable opinion of
Landlord, so destroyed that they cannot be repaired or rebuilt within ninety
(90) days after the date of such damage; or (ii) destroyed by a casualty which
is covered by Landlord's insurance but Lender or other party entitled to
insurance proceeds fails to make such proceeds available to Landlord in an
amount sufficient for restoration of the Demised Premises reasonably acceptable
to Tenant, then Landlord shall give written notice to Tenant of such
determination (the "Determination Notice") within sixty (60) days of such
casualty. Either Landlord or Tenant may terminate and cancel this Lease
effective as of the date of such casualty by giving written notice to the other
party within thirty (30) days after Tenant's receipt of the Determination
Notice. Upon the giving of such termination notice, all obligations hereunder
with respect to periods from and after the effective date of termination shall
thereupon cease and terminate. If no such termination notice is given, Landlord
shall, to the extent of the available insurance proceeds, make such repair or
restoration of the Demised Premises to the approximate condition existing prior
to such casualty, promptly and in such manner as not to unreasonably interfere
with Tenant's use and occupancy of the Demised Premises (if Tenant is still
occupying the Demised Premises). Base Rent and Additional Rent shall
proportionately ▇▇▇▇▇ during the time that the Demised Premises or any part
thereof are unusable by reason of any such damage thereto.
21. Condemnation.
(a) If all of the Demised Premises is taken or condemned for a
public or quasi-public use, or if a portion of the Demised Premises is taken or
condemned for a public or quasi-public use and the remaining portion thereof is
not usable by Tenant in the reasonable opinion of Landlord, this Lease shall
terminate as of the earlier of the date title to the condemned real estate vests
in the condemnor or the date on which the Demised Premises are not usable by
Tenant. In such event, the Base Rent herein reserved and all Additional Rent and
other sums payable hereunder shall be apportioned and paid in full by Tenant to
Landlord to that date, all Base Rent, Additional Rent and other sums payable
hereunder prepaid for periods beyond that date shall be repaid by Landlord to
Tenant on the date such apportioned payment is made, and neither party shall
thereafter have any liability hereunder, except that any obligation or liability
of either party under this Lease which has accrued on or prior to such
termination date shall survive.
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(b) If only part of the Demised Premises is taken or condemned
for a public or quasipublic use and this Lease does not terminate pursuant to
Section 21(a), Landlord shall, to the extent of the award it receives, restore
the Demised Premises to a condition and to a size as nearly comparable as
reasonably possible to the condition and size thereof immediately prior to the
taking, and there shall be an equitable adjustment to the Base Rent and
Additional Rent according to the value of the Demised Premises before and after
the taking.
(c) Landlord shall be entitled to receive the entire award in
any proceeding with respect to any taking provided for in this Section 21, and
Tenant shall receive no part of such award. Nothing herein contained shall be
deemed to prohibit Tenant from making a separate claim, against the condemnor,
to the extent permitted by law, for the value of Tenant's leasehold estate,
moveable trade fixtures, machinery and moving expenses, provided that the making
of such claim shall not and does not adversely affect or diminish Landlord's
award.
22. Tenant's Default.
(a) The occurrence of any one or more of the following events
shall constitute an "Event of Default" of Tenant under this Lease:
(i) if Tenant fails to pay Base Rent or any
Additional Rent hereunder as and when such rent becomes due and such failure
shall continue for more than ten (10) days after Landlord gives written notice
to Tenant of such failure;
(ii) intentionally omitted;
(iii) if the Demised Premises become deserted or
abandoned for more than thirty (30) consecutive days;
(iv) if Tenant permits to be done anything which
creates a lien upon the Demised Premises and fails to discharge or bond such
lien, or post security with Landlord acceptable to Landlord within thirty (30)
days after receipt by Tenant of written notice thereof;
(v) if Tenant fails to maintain in force all policies
of insurance required by this Lease and such failure shall continue for more
than ten (10) days after Landlord gives Tenant written notice of such failure;
(vi) if any petition is filed by or against Tenant
under any present or future section or chapter of the Bankruptcy Code, or under
any similar law or statute of the United States or any state thereof (which, in
the case of an involuntary proceeding, is not permanently discharged, dismissed,
stayed, or vacated, as the case may be, within ninety (90) days of
commencement), or if any order for relief shall be entered against Tenant in any
such proceedings;
(vii) intentionally omitted;
(viii) if a receiver, custodian, or trustee is
appointed for the Demised Premises or for all or substantially all of the assets
of Tenant, which appointment is not vacated within sixty (60) days following the
date of such appointment; or
(ix) if Tenant fails to perform or observe any other
term of this Lease and such failure shall continue for more than thirty (30)
days after Landlord gives Tenant written notice of such failure, or, if such
failure cannot be corrected within such thirty (30) day period, if Tenant does
not
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commence to correct such default within said thirty (30) day period and
thereafter diligently prosecute the correction of same to completion within a
reasonable time.
(b) Upon the occurrence of any one or more Events of Default,
Landlord may, at Landlord's option, without any demand or notice whatsoever
(except as expressly required in this Section 22):
(i) Terminate this Lease by giving Tenant notice of
termination, in which event this Lease shall expire and terminate on the date
specified in such notice of termination and all rights of Tenant under this
Lease and in and to the Demised Premises shall terminate. Tenant shall remain
liable for all obligations under this Lease arising up to the date of such
termination, and Tenant shall surrender the Demised Premises to Landlord on the
date specified in such notice; or
(ii) Terminate this Lease as provided in Section
22(b)(i) hereof and recover from Tenant all damages Landlord may incur by reason
of Tenant's default, including, without limitation, an amount which, at the date
of such termination, is calculated as follows: (1) the value of the excess, if
any, of (A) the Base Rent, Additional Rent and all other sums which would have
been payable hereunder by Tenant for the period commencing with the day
following the date of such termination and ending with the Expiration Date had
this Lease not been terminated (the "Remaining Term"), over (B) the aggregate
fair market rental value of the Demised Premises for the Remaining Term (which
excess, if any shall be discounted to present value at the "Treasury Yield" as
defined below for the Remaining Term); plus (2) the costs of recovering
possession of the Demised Premises and all other expenses incurred by Landlord
due to Tenant's default, including, without limitation, reasonable attorney's
fees; plus (3) the unpaid Base Rent and Additional Rent earned as of the date of
termination plus any interest and late fees due hereunder, plus other sums of
money and damages owing on the date of termination by Tenant to Landlord under
this Lease or in connection with the Demised Premises. The amount as calculated
above shall be deemed immediately due and payable. The payment of the amount
calculated in subparagraph (ii)(l) shall not be deemed a penalty but shall
merely constitute payment of liquidated damages, it being understood and
acknowledged by Landlord and Tenant that actual damages to Landlord are
extremely difficult, if not impossible, to ascertain. "Treasury Yield" shall
mean the rate of return in percent per annum of Treasury Constant Maturities for
the length of time specified as published in document H.15(519) (presently
published by the Board of Governors of the U.S. Federal Reserve System titled
"Federal Reserve Statistical Release") for the calendar week immediately
preceding the calendar week in which the termination occurs. If the rate of
return of Treasury Constant Maturities for the calendar week in question is not
published on or before the business day preceding the date of the Treasury Yield
in question is to become effective, then the Treasury Yield shall be based upon
the rate of return of Treasury Constant Maturities for the length of time
specified for the most recent calendar week for which such publication has
occurred. If no rate of return for Treasury Constant Maturities is published for
the specific length of time specified, the Treasury Yield for such length of
time shall be the weighted average of the rates of return of Treasury Constant
Maturities most nearly corresponding to the length of the applicable period
specified. If the publishing of the rate of return of Treasury Constant
Maturities is ever discontinued, then the Treasury Yield shall be based upon the
index which is published by the Board of Governors of the U.S. Federal Reserve
System in replacement thereof or, if no such replacement index is published, the
index which, in Landlord's reasonable determination, most nearly corresponds to
the rate of return of Treasury Constant Maturities. In determining the aggregate
fair market rental value pursuant to subparagraph (ii)(l)(B) above, the parties
hereby agree that, at the time Landlord seeks to enforce this remedy, all
relevant factors should be considered, including, but not limited to, (a) the
length of time remaining in the Term, (b) the then current market conditions in
the general area in which the Building is located, (c) the likelihood of
reletting the Demised Premises for a period of time equal to the remainder of
the Term, (d) the net effective rental rates then being obtained by landlords
for similar type space of similar size in similar type buildings in the general
area in which the Building is located, (e) the vacancy levels in the general
area in which the Building is located, (f) current levels of new construction
that will be completed
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during the remainder of the Term and how this construction will likely affect
vacancy rates and rental rates and (g) inflation; or
(iii) Intentionally Omitted
(iv) Without terminating this Lease, in its own name
but as agent for Tenant, enter into and upon and take possession of the Demised
Premises or any part thereof. Any property remaining in the Demised Premises may
be removed and stored in a warehouse or elsewhere at the cost of, and for the
account of, Tenant without Landlord being deemed guilty of trespass or becoming
liable for any loss or damage which may be occasioned thereby unless caused by
Landlord's negligence. Thereafter, Landlord may, but shall not be obligated to,
lease to a third party the Demised Premises or any portion thereof as the agent
of Tenant upon such terms and conditions as Landlord may deem necessary or
desirable in order to relet the Demised Premises. The remainder of any rentals
received by Landlord from such reletting, after the payment of any indebtedness
due hereunder from Tenant to Landlord, and the payment of any costs and expenses
of such reletting, shall be held by Landlord to the extent of and for
application in payment of future rent owed by Tenant, if any, as the same may
become due and payable hereunder. If such rentals received from such reletting
shall at any time or from time to time be less than sufficient to pay to
Landlord the entire sums then due from Tenant hereunder, Tenant shall pay any
such deficiency to Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this Lease
for any such previous default provided same has not been cured; or
(v) Without terminating this Lease, and with or
without notice to Tenant, enter into and upon the Demised Premises and, without
being liable for prosecution or any claim for damages therefor, maintain the
Demised Premises and repair or replace any damage thereto or do anything or make
any payment for which Tenant is responsible hereunder. Tenant shall reimburse
Landlord immediately upon demand for any expenses which Landlord incurs in thus
effecting Tenant's compliance under this Lease and Landlord shall not be liable
to Tenant for any damages with respect thereto; or
(vi) Without liability to Tenant or any other party
and without constituting a constructive or actual eviction, suspend or
discontinue furnishing or rendering to Tenant any property, material, labor,
utilities or other service, wherever Landlord is obligated to furnish or render
the same so long as an Event of Default exists under this Lease; or
(vii) With or without terminating this Lease, allow
the Demised Premises to remain unoccupied and collect rent from Tenant as it
comes due; or
(viii) Pursue such other remedies as are available at
law or equity.
(c) If this Lease shall terminate as a result of or while
there exists an Event of Default hereunder, any funds of Tenant held by Landlord
may be applied by Landlord to any damages payable by Tenant (whether provided
for herein or by law) as a result of such termination or default.
(d) Neither the commencement of any action or proceeding, nor
the settlement thereof, nor entry of judgment thereon shall bar Landlord from
bringing subsequent actions or proceedings from time to time, nor shall the
failure to include in any action or proceeding any sum or sums then due be a bar
to the maintenance of any subsequent actions or proceedings for the recovery of
such sum or sums so omitted.
(e) No agreement to accept a surrender of the Demised Premises
and no act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Demised Premises unless made in
writing and signed by Landlord. No re-entry or taking possession of the Demised
Premises by Landlord shall constitute an election by Landlord to terminate this
Lease unless a written notice
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of such intention is given to Tenant. No provision of this Lease shall be deemed
to have been waived by either party unless such waiver is in writing and signed
by the party making such waiver. Landlord's acceptance of Base Rent or
Additional Rent in full or in part following an Event of Default hereunder shall
not be construed as a waiver of such Event of Default. No custom or practice
which may grow up between the parties in connection with the terms of this Lease
shall be construed to waive or lessen either party's right to insist upon strict
performance of the terms of this Lease, without a written notice thereof to the
other party.
(f) If an Event of Default shall occur, Tenant shall pay to
Landlord, on demand, all expenses incurred by Landlord as a result thereof,
including reasonable attorneys' fees, court costs and expenses actually
incurred.
23. Landlord's Right of Entry. Tenant agrees to permit Landlord and the
authorized representatives of Landlord and of Lender to enter upon the Demised
Premises at all reasonable times for the purposes of inspecting the Demised
Premises and Tenant's compliance with this Lease, and making any necessary
repairs thereto; provided that, except in the case of an emergency, Landlord
shall give Tenant reasonable prior notice of Landlord's intended entry upon the
Demised Premises. Nothing herein shall imply any duty upon the part of Landlord
to do any work required of Tenant hereunder, and the performance thereof by
Landlord shall not constitute a waiver of Tenant's default in failing to perform
it. Landlord shall not be liable for inconvenience, annoyance, disturbance or
other damage to Tenant by reason of making such repairs or the performance of
such work in the Demised Premises or on account of bringing materials, supplies
and equipment into or through the Demised Premises during the course thereof,
and the obligations of Tenant under this Lease shall not thereby be affected;
provided, however, that Landlord shall use reasonable efforts not to disturb or
otherwise interfere with Tenant's operations in the Demised Premises in making
such repairs or performing such work. Landlord also shall have the right upon
reasonable notice to enter the Demised Premises at all reasonable times to
exhibit the Demised Premises to any prospective purchaser or mortgagee thereof,
or, during the last six (6) months of the Term, to any prospective tenant
thereof.
24. Lender's Rights.
(a) For purposes of this Lease:
(i) "Lender" as used herein means the current holder
of a Mortgage;
(ii) "Mortgage" as used herein means any or all
mortgages, deeds to secure debt, deeds of trust or other instruments in the
nature thereof which may now or hereafter affect or encumber Landlord's title to
the Demised Premises, and any amendments, modifications, extensions or renewals
thereof.
(b) Except as hereinafter provided, this Lease and all rights
of Tenant hereunder are and shall be subject and subordinate to the lien and
security title of any Mortgage. Tenant recognizes and acknowledges the right of
Lender to foreclose or exercise the power of sale against the Demised Premises
under any Mortgage. Tenant's subordination hereunder shall be conditioned upon
entering into a subordination, nondisturbance and attornment agreement with the
Mortgagee, reasonably acceptable to Tenant and consistent with this Paragraph
24.
(c) Tenant shall, in confirmation of the subordination set
forth in Section 24(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary,
upon demand, at any time or times, execute, acknowledge, and deliver to Landlord
or to Lender any and all instruments reasonably acceptable to Tenant requested
by either of them to evidence such subordination.
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(d) At any time during the Term, Lender may, by written notice
to Tenant, make this Lease superior to the lien of its Mortgage. If requested by
Lender, Tenant shall, upon demand, at any time or times, execute, acknowledge,
and deliver to Lender, any and all instruments reasonably acceptable to Tenant
that may be necessary to make this Lease superior to the lien of any Mortgage.
(e) If Lender (or Lender's nominee, or other purchaser at
foreclosure) shall hereafter succeed to the rights of Landlord under this Lease,
whether through possession or foreclosure action or delivery of a new lease,
Tenant shall attorn to and recognize such successor as Tenant's landlord under
this Lease without change in the terms and provisions of this Lease and shall
promptly execute and deliver any instrument that may be necessary to evidence
such attornment, provided that such successor shall not be bound by (i) any
payment of Base Rent or Additional Rent for more than one month in advance,
except prepayments in the nature of security for the performance by Tenant of
its obligations under this Lease, and then only if such prepayments have been
deposited with and are under the control of such successor, (ii) any provision
of any amendment to the Lease to which Lender has not consented, (iii) the
defaults of any prior landlord under this Lease, or (iv) any offset rights
arising out of the defaults of any prior landlord under this Lease. Upon such
attornment, this Lease shall continue in full force and effect as a direct lease
between each successor landlord and Tenant, subject to all of the terms,
covenants and conditions of this Lease.
(f) In the event there is a Mortgage at any time during the
Term, Landlord shall use reasonable efforts to cause the Lender to enter into a
subordination, nondisturbance and attornment agreement with Tenant reasonably
satisfactory to Tenant and consistent with this Section 24.
25. Estoppel Certificate. Landlord and Tenant agree, at any time, and
from time to time, within fifteen (15) days after written request of the other,
to execute, acknowledge and deliver a statement in writing in recordable form to
the requesting party and/or its designee certifying that: (i) this Lease is
unmodified and in full force and effect (or, if there have been modifications,
that the same is in full force and effect, as modified), (ii) the dates to which
Base Rent, Additional Rent and other charges have been paid, (iii) whether or
not, to the best of its knowledge, there exists any failure by the requesting
party to perform any term, covenant or condition contained in this Lease, and,
if so, specifying each such failure, (iv) (if such be the case) Tenant has
unconditionally accepted the Demised Premises and is conducting its business
therein, and (v) and as to such additional matters as may be requested by
Landlord and approved by Tenant, it being intended that any such statement
delivered pursuant hereto may be relied upon by the requesting party and by any
purchaser of title to the Demised Premises or by any mortgagee or any assignee
thereof or any party to any sale-leaseback of the Demised Premises, or the
landlord under a ground lease affecting the Demised Premises.
26. Landlord Liability. No owner of the Demised Premises, whether or
not named herein, shall have liability hereunder after it ceases to hold title
to the Demised Premises. Neither Landlord nor any officer, director,
shareholder, partner or principal of Landlord, whether disclosed or undisclosed,
shall be under any personal liability with respect to any of the provisions of
this Lease. In the event Landlord is in breach or default with respect to
Landlord's obligations or otherwise under this Lease, Tenant shall look solely
to the equity of Landlord in the Building for the satisfaction of Tenant's
remedies. It is expressly understood and agreed that Landlord's liability under
the terms, covenants, conditions, warranties and obligations of this Lease shall
in no event exceed the loss of Landlord's equity interest in the Building.
27. Notices. Any notice required or permitted to be given or served by
either party to this Lease shall be deemed given when made in writing, and
either (i) personally delivered, (ii) deposited with the United States Postal
Service, postage prepaid, by registered or certified mail, return receipt
requested, or (iii) delivered by licensed overnight delivery service providing
proof of delivery, properly addressed to the address set forth in Section 1(m)
(as the same may be changed by giving written notice of the aforesaid in
accordance with this Section 27). If any notice mailed is properly addressed
with appropriate postage but
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returned for any reason, such notice shall be deemed to be effective notice and
to be given on the date of mailing.
28. Brokers. Tenant represents and warrants to Landlord that, except
for those parties set forth in Section 1(o) (the "Brokers"), Tenant has not
engaged or had any conversations or negotiations with any broker, finder or
other third party concerning the leasing of the Demised Premises to Tenant who
would be entitled to any commission or fee based on the execution of this Lease.
Tenant hereby further represents and warrants to Landlord that Tenant is not
receiving and is not entitled to receive any rebate, payment or other
remuneration, either directly or indirectly, from the Brokers, and that it is
not otherwise sharing in or entitled to share in any commission or fee paid to
the Brokers by Landlord or any other party in connection with the execution of
this Lease, either directly or indirectly. Tenant hereby indemnifies Landlord
against and from any claims for any brokerage commissions (except those payable
to the Brokers, all of which are payable by Landlord pursuant to a separate
agreement) and all costs, expenses and liabilities in connection therewith,
including, without limitation, reasonable attorneys' fees and expenses, for any
breach of the foregoing. The foregoing indemnification shall survive the
termination of this Lease for any reason.
29. Assignment and Subleasing.
(a) Tenant may not assign, mortgage, pledge, encumber or
otherwise transfer this Lease, or any interest hereunder, or sublet the Demised
Premises, in whole or in part, without on each occasion first obtaining the
prior express written consent of Landlord, which consent Landlord shall not
unreasonably withhold or delay. Permitted subtenants or assignees shall become
liable directly to Landlord for all obligations of Tenant hereunder, without,
however, relieving Tenant of any of its liability hereunder. No such assignment,
subletting, occupancy or collection shall be deemed the acceptance of the
assignee, tenant or occupant, as Tenant, or a release of Tenant from the further
performance by Tenant of Tenant's obligations under this Lease. Any assignment
or sublease consented to by Landlord shall not relieve Tenant (or its assignee)
from obtaining Landlord's consent to any subsequent assignment or sublease.
30. Termination or Expiration.
(a) No termination of this Lease prior to the normal ending
thereof, by lapse of time or otherwise, shall affect Landlord's right to collect
rent for the period prior to termination thereof.
(b) Except as provided in Section 18 above, at the expiration
or earlier termination of the Term of this Lease, Tenant shall surrender the
Demised Premises and all improvements, alterations and additions thereto, and
keys therefor to Landlord, clean and neat, and in the same condition as at the
Lease Commencement Date, excepting normal wear and tear, condemnation and
casualty other than that required to be insured against by Tenant hereunder.
(c) If Tenant remains in possession of the Demised Premises
after expiration of the Term, with or without Landlord's acquiescence and
without any express agreement of the parties, Tenant shall be a
tenant-at-sufferance at 125% of the Base Rent in effect at the end of the Term
for sixty (60) days, and thereafter at one hundred fifty percent (150%) of the
Base Rent in effect at the end of the Term. Tenant shall also continue to pay
all other Additional Rent due hereunder, and there shall be no renewal of this
Lease by operation of law. In addition to the foregoing, Tenant shall be liable
for all costs incurred by Landlord in enforcing the provisions of this Section
30. No receipt of money by Landlord from Tenant after the termination of this
Lease or Tenant's right of possession of the Demised Premises shall reinstate,
continue or extend the Term or Tenant's right of possession.
31. Intentionally Omitted.
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32. Late Payments. In the event any installment of rent, inclusive of
Base Rent, or Additional Rent or other sums due hereunder, if any, is not paid
within ten (10) days after the date when due, Tenant shall pay interest on the
amount past due at the lesser of (i) the maximum interest rate allowed by law or
(ii) a rate of fifteen percent (15%) per annum (the "Interest Rate") to defray
the additional expenses incurred by Landlord in processing such payment.
33. Rules and Regulations. Tenant agrees to abide by the rules and
regulations set forth on Exhibit D attached hereto, as well as other rules and
regulations reasonably promulgated by Landlord from time to time, so long as
such rules and regulations are uniformly enforced against all tenants of
Landlord in the Project and reasonably acceptable to Tenant.
34. Quiet Enjoyment. So long as Tenant has not committed an Event of
Default hereunder, Landlord agrees that Tenant shall have the right to quietly
use and enjoy the Demised Premises for the Term.
35. Miscellaneous.
(a) The parties hereto hereby covenant and agree that Landlord
shall receive the Base Rent, Additional Rent and all other sums payable by
Tenant hereinabove provided as net income from the Demised Premises, without any
abatement (except as set forth in Section 20 and Section 21), reduction,
set-off, counterclaim, defense or deduction whatsoever, except as set forth in
Exhibit C attached hereto.
(b) If any clause or provision of this Lease is determined to
be illegal, invalid or unenforceable under present or future laws effective
during the Term, then and in that event, it is the intention of the parties
hereto that the remainder of this Lease shall not be affected thereby, and that
in lieu of such illegal, invalid or unenforceable clause or provision there
shall be substituted a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
(c) All rights, powers, and privileges conferred hereunder
upon the parties hereto shall be cumulative, but not restrictive to those given
by law.
(d) TIME IS OF THE ESSENCE OF THIS LEASE.
(e) No failure of Landlord or Tenant to exercise any power
given Landlord or Tenant hereunder or to insist upon strict compliance by
Landlord or Tenant with its obligations hereunder, and no custom or practice of
the parties at variance with the terms hereof shall constitute a waiver of
Landlord's or Tenant's rights to demand exact compliance with the terms hereof.
(f) This Lease contains the entire agreement of the parties
hereto as to the subject matter of this Lease and no representations,
inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein shall be of any force and effect. The masculine (or neuter)
pronoun, singular number shall include the masculine, feminine and neuter gender
and the singular and plural number.
(g) This contract shall create the relationship of landlord
and tenant between Landlord and Tenant; no estate shall pass out of Landlord;
Tenant has a usufruct, not subject to levy and sale, and not assignable by
Tenant except as expressly set forth herein.
(h) Under no circumstances shall Tenant have the right to
record this Lease or a memorandum thereof.
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(i) The captions of this Lease are for convenience only and
are not a part of this Lease, and do not in any way define, limit, describe or
amplify the terms or provisions of this Lease or the scope or intent thereof.
(j) This Lease may be executed in multiple counterparts, each
of which shall constitute an original, but all of which taken together shall
constitute one and the same agreement.
(k) This Lease shall be interpreted under the laws of the
State where the Demised Premises are located.
(l) The parties acknowledge that this Lease is the result of
negotiations between the parties, and in construing any ambiguity hereunder no
presumption shall be made in favor of either party. No inference shall be made
from any item which has been stricken from this Lease other than the deletion of
such item.
36. Special Stipulations. The Special Stipulations, if any, attached
hereto as Exhibit C, are incorporated herein and made a part hereof, and to the
extent of any conflict between the foregoing provisions and the Special
Stipulations, the Special Stipulations shall govern and control.
37. Lease Date. For purposes of this Lease, the term "Lease Date" shall
mean the later date upon which this Lease is signed by Landlord and Tenant.
38. Authority. If Tenant is not a natural person, Tenant shall cause
its corporate secretary or general partner, as applicable, to execute the
certificate attached hereto as Exhibit E. Tenant is authorized by all required
corporate or partnership action to enter into this Lease and the individual(s)
signing this Lease on behalf of Tenant are each authorized to bind Tenant to its
terms.
39. No Offer Until Executed. The submission of this Lease to Tenant for
examination or consideration does not constitute an offer to lease the Demised
Premises and this Lease shall become effective, if at all, only upon the
execution and delivery thereof by Landlord and Tenant.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seals, the day and year first above written.
Date: MAR 31, 1999 LANDLORD:
---------------------
NEW YORK LIFE INSURANCE COMPANY, a
New York mutual insurance company
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
-----------------------------------
[CORPORATE SEAL]
Date: 3-26-99 TENANT:
---------------------
DAISYTEK, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: VP Admin/Secretary
-----------------------------------
Attest: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Exec. Asst.
-----------------------------------
[CORPORATE SEAL]
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